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Focus on Bond Market Speculation Continues.

CHINA
  • China is set to continue to minimise speculative trading in longer dated bonds according to National Association of Financial Markets Institutional Investors official (NAFMII).
  • Illegal activities will be targeted with financial market order the key objective for regulators.
  • Regulators are not seeking to set target ranges for bond yields, despite indications of their discomfort at the low level of yields.
  • Some financial institutions rely on bond investments for up to 30% of their revenue and have been accused of inappropriate practices by regulators.
  • This has resulted in bond trading activity halts and cancelling of trades.
  • These comments from the NAFMII are the latest in the focus on bond market activity and the need for proper practices from participants.
  • Bond market activity during the morning session on Thursday was mainly concentrated in the 10-year; which saw the yield down 0.5bp.

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